September 24, 2012

Week of October 1 – Submit proposed budget to City Council.

October 22 – Work Session, Q&A and external agency requests.

November 12 – Work Session, Capital Improvement Plan.

November 19 – Public Hearing & 1st reading of property tax ordinance.

December 3 – Consideration of budget approval December 10 – Work session if needed.

$21,978,669

$23,374,345 $23,254,704

$22,825,780

$23,995,360

$20,500,000

$21,000,000

$21,500,000

$22,000,000

$22,500,000

$23,000,000

$23,500,000

$24,000,000

$24,500,000

2009 Actual 2010 Actual 2011 Actual 2012 Budget 2013 Estimate

Description FY 2011 Actual FY 2012 Budget FY 2013 Estimate

$ Change % Change

Taxes $17,713,749 $17,037,535 $17,088,100 $50,565 0%

Licenses & Permits 290,043 291,800 305,750 13,950 5%

Fines & Fees 530,035 508,700 488,580 (20,120) (4)%

Use of Money & Property

1,756,374 1,937,385 2,157,175 219,790 11%

Intergov’t 1,827,015 1,875,165 2,037,385 162,220 9%

Current Services 990,177 924,355 1,080,625 156,270 17%

Misc. 77,260 36,425 42,000 5,575 15%

Transfers 70,051 214,415 795,745 581,330 271%

TOTAL $23,254,704 $22,825,780 $23,995,360 $1,169,580 5%

Tax 2011 Actual 2012 Budget 2013 Estimate $ Change % Change

Property $4,329,179 $3,434,610 $3,105,475 ($329,135) (10)%

SSA #1 Property 154,917 157,000 156,000 (1,000) (1)%

Replacement 800,637 643,000 774,000 131,000 21%

State income 2,356,489 2,635,345 2,740,325 104,980 4%

Sales 5,153,530 5,238,980 5,317,565 78,585 1.5%

Local use 475,467 456,000 461,785 5,785 1.3%

Home rule 2,668,060 2,702,500 2,743,040 40,540 1.5%

Food & Beverage

1,334,093 1,352,800 1,360,910 8,110 .6%

Hotel/Motel 431,254 409,000 420,000 11,000 .2%

Auto rental 10,123 8,300 9,000 700 8.4%

TOTAL $17,713,749 $17,037,535 $17,088,100 $50,565 2%

Assumptions:2011 Mutliplier -0.43%2010 Taxable EAV 315,357,449 Est 2011 Taxable EAV (314,000,000) Est decrease in EAV (3,175,410)

TAXING BODY 2011 LEVY

ALT. C: FLAT LEVY; GENERAL ABSORBS

REDUCTION; PENSIONS AT ARC < UT; $20,000

FOR LIBRARY

ALT. C: CHANGE

FROM 2011 LEVY

General 3,434,873 3,105,476 (329,397) IMRF 696,940 704,150 7,210 Police Pension 946,703 912,097 (34,606) Fire Pension 1,342,477 1,429,690 87,213 Library 1,354,145 1,374,145 20,000 TOTAL LEVY REQUEST 7,775,138 7,525,558 (249,580)

Total Levy % Increase vs. 2011 -3.210%

Estimated Tax Rate 2.465 2.395 Estimated $ Change in Rate vs 2011 (0.071) Estimated % Change in Rate vs 2011 -2.88%

2010 Levy $50,000 Value 410.92 399.13 Estimated $ Change in $50,000 Value (11.79)

Property tax levy presented at work session on September 10, 2012 - 7,775,138.00 Reduction in levy with utility tax (249,580.00)

Overall, property taxes would decrease by $249,580 if utility tax revenues are approved by Council (not a tax increase)

Will see a full year of telecommunication infrastructure fee at 5% or $756,000 to pay for 911 dispatchers; increase of $206,750 from FY 2012

Estimating an overall increase of $32,000 in recreation facilities revenue; golf course, pools, campground and recreation facility and events, and Pavilion

Transfer of $536,315 from the Planning Fund

$22,679,819

$23,197,500

$23,552,407

$22,976,485

$23,995,360

$22,000,000

$22,500,000

$23,000,000

$23,500,000

$24,000,000

$24,500,000

2009 Actual 2010 Actual 2011 Actual 2012 Budget 2013 Estimate

Department FY 2011 Actual

FY 2012 Budget

FY 2013 Estimate $ Change %

Change

Administration $2,993,624 $2,819,455 $3,061,275 $241,820 8.6%

Finance 1,307,509 1,268,550 1,369,355 100,805 7.9%

Comm. Dev. 3,220,791 3,240,990 3,293,150 52,160 1.6%

Pub. Works 6,216,354 5,725,075 5,493,250 (231,825) 4.0%

Police 5,952,675 6,203,390 6,686,155 482,765 7.8%

Fire 3,861,454 3,719,025 4,092,175 142,485 3.8%

TOTAL $23,552,407 $22,976,485 $23,995,360 1,018,875 4.4%

Category FY 2011 Actual

FY 2012 Budget

FY 2013 Estimate

$ Change % Change

Personnel $16,522,438 $15,450,800 $16,480,410 $1,029,610 6.7%

Contractual 3,765,265 4,786,100 4,398,415 (387,685) (8.1)%

Commodities 1,228,935 1,284,950 1,289,560 4,610 .4%

Capital 76,646 1,335 11,780 10,445 782.4%

Other 1,959,123 1,453,300 1,815,195 361,895 24.9%

Total $23,552,407 $22,976,485 $23,995,360 $1,018,875 4.4%

Total personnel costs in General Fund is approximately $16.7M or 70% of budget

All 911 staff now moved to General Fund from 911 Fund; approximately additional $157,000

6 positions will not be filled: 1 maintenance position at Street; 1 maintenance position at Airport; 1 police officer; 1 janitor/maintenance position at PSB; 1 firefighter and 1 fire captain

Retiree health fund contribution reduction of $164,955

Decrease in capital maintenance for Pub Works and Community Development; moved to and budgeted in Utility Tax Capital Improvement Fund $281,300

If utility tax is approved, a new fund will be created to fund capital improvements and maintenance, pension fund contributions and OPEB contributions; approximately $635,000 in FY 2013

Description Estimated Cost

Hawthorne connecting hallway floor replacement 75,000

Central Garage building addition 200,000

Various fiber projects 45,000

Repair masonry on community center building 100,000

Upgrade insulation walls at Lakeside recreation facility 300,000

Bike path – City’s share reduced 200,000

6 positions unfilled (street, airport, police, fire & PSB janitor) 278,920

Total $1,198,920

Estimated Revenues $23,995,360

Estimated Expenditures $23,995,360

Estimated Revenues over/(under) Estimated Expenditures

$0

Fund balance requirement: 16 weeks, or approximately 30%, of operating expenses

Established to maintain the City’s ability to provide services during emergencies and unexpected declines in the economy

Utilized to compensate for late receipts – i.e. income tax and property tax

Utilized to subsidize funds with negative cash flow City is self insured; if needed, liabilities must be paid

A bond rating performs the isolated function of credit risk evaluation

The bond rating is often the single most important factor affecting the interest cost on bonds

Rating is based on economy; debt structure; financial condition; demographic factors; management practices of the governing body and administration

Moody’s rating of City Aa3 in Sept 2011; noted City’s fund balance policy & consistently healthy reserves

Grade Description

Aaa Demonstrates the strongest creditworthiness to other U.S. municipal or tax-exempt issuers

Aa Demonstrates very strong creditworthiness relative to other U.S. municipal or tax-exempt issuers

A Presents above-average creditworthiness relative to other U.S. municipal or tax-exempt issuers

Baa Represents average creditworthiness relative to other U.S. municipal or tax-exempt issuers

1,2 or 3 Based on strength of the issue within each category; 1 would be strongest group & 3 would be weakest group

Grade Moody’s Standard & Poor’s Fitch

Best Quality Aaa AAA AAA

High Quality Aa1 Aa2 Aa3

AA+ AA AA-

AA+ AA AA-

Upper Medium A1 A2 A3

A+ A A-

A+ A A-

Medium Baa1 Baa2 Baa3

BBB+ BBB BBB-

BBB+ BBB BBB-

Community Electricity Gas Rate

Carbondale Y Y 5%

Danville N N -

Moline Y Y 5%

Monmouth N N -

Normal Y Y 5%

Pekin N N -

Peoria Y Y 5%

Quincy N N -

Rock Island Y Y 5%

An Ameren IL Company report indicates the company collects electric tax for approximately 260 communities and gas tax for approximately 185 communities

GAS ESTIMATED REVENUE

ELECTRIC ESTIMATED REVENUE

Rate by % Est. Revenue

3% $462,423

4% 616,565

5% 770,706

% of Max. Rate Est. Revenue

50% $785,484

80% 1,256,775

100% 1,570,969

Total = $1,247,907

Bungalow Built in 1919 1st floor 1121 sq. ft.; 2nd floor 560 sq. ft. Approximately 10,540 kilowatts used annually Approximately 580 therms used annually

Service Year 1 Year 2 Year 3

Electric – Estimated Month $2.76 $4.42 $5.52

Electric – Estimated Annual $33.09 $53.01 $66.18

Gas – Estimated Month $1.69 $2.25 $2.81

Gas - Estimated Annual $20.23 $26.97 $33.72

Electric/Gas – Estimated Month $4.44 $6.67 $8.33

Electric/Gas – Estimated Annual $53.32 $79.98 $99.90

Description Allocation Year 1 (3%/50%) Year 2 (4%/80%) Year 3 (5%/100%)

Annual pension contributions

20% $249,581 374,668 468,335

Annual OPEB contributions

10% 124,791 187,334 234,168

Capital projects/ infrastructure/ Maintenance

40% 499,163 749,336 936,670

Park capital projects/ maintenance

10% 124,791 187,334 234,168

Property tax relief 20% 249,581 374,668 468,335

Total 100% $1,247,907 $1,873,340 $2,341,676

Proposal would address significant Council Priorities. Fiscal Health of Organization Provide Community Amenities Develop infrastructure management plans

Allow City to fund police and fire annual contribution based on entry age normal cost method. Method recommended by actuary to address unfunded liability.

Allow City to make GASB based OPEB contribution. Generates dedicated source for capital projects. Portion of revenue stream could be considered for debt service.

Creates designated revenue source for Park capital projects for improving and maintaining system. Funds could be used for matching grants.

A portion of the revenue could be dedicated to reducing property taxes.

Allocation could be designated in approval.

Infrastructure Maintenance

Reduce General Fund an additional $635,000 Reduce other budget items $363,326 No funding available to address OPEB liability No long term consistent source of revenue to

address non-road related capital projects and maintenance

Need to develop alternate strategy to balance budget

Structural imbalance deepens

$15,950,860

$17,467,353

$18,616,143

$17,238,092

$18,023,494$17,713,749

$13,184,280

$14,050,393

$14,623,788

$15,275,797 $15,395,646

$16,522,438

$10,000,000

$11,000,000

$12,000,000

$13,000,000

$14,000,000

$15,000,000

$16,000,000

$17,000,000

$18,000,000

$19,000,000

$20,000,000

2006 2007 2008 2009 2010 2011

Tax Revenue Personnel Expense

Increase other existing revenues Increase property tax to offset increase in pension costs

Additional expenditure reduction Level required would require service and/or personnel

reductions Combination of revenue and expenditure

adjustments Delay addressing long term liabilities (infrastructure,

OPEB, Pension)